Quick answer: A real IRS audit always starts with a letter by mail, never a phone call, text or email. The letter names the tax year, the items being examined, a letter number such as Letter 566 or Letter 2205, a contact person and a response date, usually about 30 days out. Note the deadline, gather records only for the items listed, ask for more time if needed, and decide who will respond before you contact the IRS.
Marcus runs a two-truck HVAC company. On a Thursday in March he found a thick envelope in the mailbox with "Department of the Treasury, Internal Revenue Service" in the corner. Inside were six pages. The first line said, "We selected your federal income tax return for examination."
His first thought was that it had to be a scam. His second was to call the number and explain everything. Both instincts are common, and both can cause problems. This guide covers what a real IRS audit letter looks like, what the different letters mean, and what to do in the first 30 days.
Key Takeaways
- The IRS begins audits by mail. A first contact by phone, text or email is a red flag.
- The letter number shows the audit type: Letter 566 for a mail audit, Letter 2205 or 3572 for an office or field audit.
- A CP2000 is an income-matching proposal, not a formal audit, but it still needs an answer.
- Answer only what is requested, and keep proof of everything you send.
- A Notice of Deficiency gives you 90 days to petition the U.S. Tax Court, and that deadline cannot be extended.
What a Real IRS Audit Letter Looks Like
The IRS begins every audit by mail. It does not open an audit by phone, text message, email or social media. If the first contact came any other way, be suspicious.
The envelope
- It is a plain government envelope with the return address "Department of the Treasury, Internal Revenue Service" and an IRS office or campus city.
- It arrives through the U.S. Postal Service. Some audit letters come by certified mail, but many come by ordinary first-class mail.
- It is addressed to the name and address on your most recent tax return.
The letter
A genuine audit letter contains:
- your name, address, and a partly hidden taxpayer identification number,
- the tax year and the form being examined,
- a letter or notice number, usually in the top or bottom right corner,
- the name, employee ID number and phone number of a contact person or unit,
- a response date, and
- a list of the items on the return that are being questioned, often with a document request attached.
It will usually enclose Publication 1, Your Rights as a Taxpayer.
Signs of a fake
Scam letters tend to demand immediate payment, ask for gift cards, wire transfers or cryptocurrency, threaten arrest, or tell you to pay someone other than the United States Treasury. A real audit letter asks for information. It does not ask for payment on the first page.
If you are unsure, do not use the phone number on a letter you doubt. Check your IRS online account, or call the IRS using a number from its official website.
Which Letter Do You Have?
The letter number tells you what kind of contact this is. These are the ones people most often receive.
- Letter 566. The opening letter for a correspondence audit. The IRS asks you to mail or upload documents supporting specific items.
- Letter 2205 or Letter 3572. The opening letter for an office or field audit. An examiner wants to meet, either at an IRS office or at your home or business.
- CP2000. Technically not an audit. It is a proposal to change your tax because income reported by third parties does not match your return. It still needs a careful answer.
- Letter 525. The examiner's proposed changes after a correspondence audit, with a report. You normally have 30 days to agree, send more information, or ask for an appeal.
- Letter 915 or Letter 950. A proposed adjustment after an office or field audit, with appeal rights. This is often called the 30-day letter.
- Letter 531 or Letter 3219. The Statutory Notice of Deficiency, known as the 90-day letter. You have 90 days to file a petition with the U.S. Tax Court. That deadline cannot be extended.
If you hold a 90-day letter, the audit is over and the clock for court has started. Treat it as urgent.
The Three Types of IRS Audit
Correspondence audit
This is handled entirely by mail and is by far the most common type. It usually targets a few items, such as dependents, credits, charitable gifts or business expenses. It looks simple, but it is run by a unit and not by one person, replies can cross in the mail, and a missed date leads to an automatic assessment.
Office audit
You or your representative attend an interview at an IRS office with the records listed in the letter. The scope is wider, and what is said in the interview matters.
Field audit
A revenue agent examines the books at your business, home or representative's office. This is the most thorough type and is typical for businesses and higher-income returns. Agents may ask to tour the premises and interview the owner.
How Circle of Tax Advisors helps: Our Tax Audit Defense service starts with an audit notice review. We identify the letter, the scope and the deadline, and we take over communication with the examiner under a power of attorney. In most audits the client never speaks to the IRS directly. You can also send us your notice through our audit review request page.
What to Do in the First 30 Days
1. Write down the response date
Count from the date printed on the letter, not the day you opened it. Put the deadline where you will see it.
2. Read the document request closely
The IRS is asking about specific lines on a specific return. Make a list of each item and the proof requested. The scope of the request is the scope of the audit, at least for now.
3. Pull your copy of the return
Compare the questioned items with what was filed. If a preparer filed the return, ask for the complete file, including the workpapers.
4. Gather records for those items only
Collect receipts, invoices, bank and card statements, mileage logs, contracts, and anything else that proves the amounts. If records are missing, there are accepted ways to reconstruct them, but that takes time.
5. Ask for more time if you need it
One extension is commonly granted when it is requested before the deadline. Ask in writing or by phone, and note the name and ID number of the person who agreed.
6. Decide who will respond
You have the right to be represented by an attorney, CPA or enrolled agent. Make that decision before the first substantive contact. It is much easier to present a case correctly than to repair statements already made.
7. Send an organized response and keep proof
Label each document by the item it supports. Send copies, never originals. Use a method that gives proof of delivery, and keep a full copy of what was sent.
Mistakes That Make an Audit Worse
- Ignoring the letter. The IRS will disallow every questioned item and send a bill, followed by a Notice of Deficiency.
- Sending everything you have. Extra documents invite extra questions. Answer what was asked.
- Volunteering information in conversation. A casual remark about cash jobs or personal use of a vehicle can widen the audit to other items and other years.
- Altering or creating records after the fact. Reconstructing records openly is acceptable. Backdating is not, and it can turn a civil audit into something far more serious.
- Signing the report to make it end. Signing agreement gives up your appeal rights for those items. Read the numbers, including penalties, before you sign.
- Missing the 90-day deadline. After it passes, the tax is assessed and collection begins.
Marcus was about to phone the examiner and "walk her through the whole business." We suggested a different course: answer the three items listed in the letter, with invoices and bank records for each, and nothing more. The audit closed with a small change on one item. The 20% accuracy penalty the examiner first proposed was removed after we showed he had relied on complete information given to his preparer.
How Far Back Can the IRS Go?
- Three years from the date the return was filed is the general rule.
- Six years applies if more than 25% of gross income was left off the return.
- No time limit applies to a fraudulent return or a return that was never filed.
Most audits begin within about two years of filing. If the examiner asks you to sign an extension of the time limit, you can refuse, agree, or negotiate a limited extension. Each choice has consequences, so get advice before you sign.
Why an Audit May Have Been Triggered
The IRS does not usually explain its selection, but common triggers include income that does not match Forms W-2 and 1099, business losses year after year, deductions that are high for the income level, large cash transactions, refundable credit claims, and information from a related audit of a business partner or preparer. Some returns are simply selected at random.
If You Disagree With the Result
An audit report is a proposal. You can:
- Discuss it with the examiner's manager.
- Appeal to the IRS Independent Office of Appeals, usually within 30 days of the report.
- Petition the U.S. Tax Court within 90 days of a Notice of Deficiency, without paying the tax first.
- Request audit reconsideration later, if you have new documents that were not considered.
Penalties added in an audit can often be challenged separately. See our page on IRS penalty abatement.
Have a letter with a date on it? Bring it in before you reply. Our attorneys, CPAs and enrolled agents have defended audits since 1981, and we describe the scope and cost of our work before it begins. Book a confidential conference.
IRS Audit Letters at a Glance
| Letter | What it is | Typical deadline |
|---|---|---|
| Letter 566 | Opening letter for a correspondence (mail) audit | Date on the letter, often about 30 days |
| Letter 2205 or 3572 | Opening letter for an office or field audit | Date on the letter |
| CP2000 | Proposed change from an income mismatch | Date on the notice, often about 30 days |
| Letter 525, 915 or 950 | Proposed audit changes with appeal rights | Usually 30 days |
| Letter 531 or 3219 | Notice of Deficiency | 90 days to petition the U.S. Tax Court |
Checklist: What to Do First
- Identify the notice and tax year.
- Calendar the printed deadline.
- Gather documents that support each item.
- Keep copies of everything submitted.
Get the Letter Reviewed
The first response sets the direction of the whole audit. Call Circle of Tax Advisors at 517-336-7824 or book a confidential conference.